Austin Bay

Cats don't herd, nor do entrepreneurs -- until they have to.

In a column written last month addressing the Chinese Communist Party's intensifying political dilemmas, I referred to a Wall Street Journal essay which discussed China's dissatisfied "2nd generation entrepreneurs."

This week (Nov. 11), an Associated Press article suggested the "have to" moment for China's entrepreneurs -- the economic revolutionaries who fast-tracked Beijing's economic miracle -- is much closer.

The back story: In the early 1980s, as economic stagnation strangled the Soviet Union, Chinese leader Deng Xiaoping realized he must take the risk posed by freer (but not quite free) human economic enterprise in order to maintain Communist Party control. Communist survival required creating wealth -- new wealth being the source of genuine economic growth -- and creating wealth required economic liberalization.

Deng's deal with the Chinese people, including their entrepreneurs, came with a ruthless stipulation: The Party retained political control. The Tiananmen Square massacre reinforced his maxim: economic liberalization -- yes; political liberalization -- no way.

Party control really means the whim of political functionaries rules, not the rule of law. In China, political whim circumscribes all creativity. The Wall Street Journal argued that young Chinese entrepreneurs despised "the endless wining and dining of government officials" that doing business in China requires. Party cronyism disgusted them.

According to the AP, October disgust has given way to November "demands for change from entrepreneurs who feel a simmering anger at a system that extends privileges, such as cheap credit and monopolies to politically-favored state companies."

The next sentence would cue a hardliner like Deng to send the Peoples Liberation Army to Tiananmen: "Entrepreneurs complain they are denied a say in how society is run, even as their businesses create jobs, wealth and tax revenue."

Except, intimidating non-herding entrepreneurs doesn't require tanks. "Worse," the AP added, "some (entrepreneurs) have endured arrest, torture and confiscation of their businesses at the whim of local officials."

Austin Bay

Austin Bay is the author of three novels. His third novel, The Wrong Side of Brightness, was published by Putnam/Jove in June 2003. He has also co-authored four non-fiction books, to include A Quick and Dirty Guide to War: Third Edition (with James Dunnigan, Morrow, 1996).
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